The dollar strengthened against its peers on Friday on the back of solid manufacturing data leading up to news on Greece’s bailout however once an agreement was reached the greenback came off slightly. US manufacturing PMI climbed to 54.3 in February from 53.9 in January ahead of forecasts for a decline to 53.6. The US is scheduled to release figures on existing home sales on Monday.

The euro strengthened against the dollar and the yen following an agreement reached between Greece and euro zone finance ministers to extend Greece’s bailout program for another 4 months. Market sentiment has been affected considerably as Greece’s debt saga continued to linger without a resolution in sight. Worry over Greece being subjected to a liquidity crisis at the end of February when its bailout was originally due to expire has now been put to an end. The euro was also supported by data which revealed that euro zone private sector output grew at a 7 month high in February. Markit’s composite flash PMI which factors manufacturing and services sectors jumped to 53.5 from 52.6 in January.

The pound weakened against the dollar following data released by the Office for National Statistics which revealed that UK retail sales dropped 0.3% in January compounding forecasts for a 0.2% decline. Other figures revealed that UK public sector borrowing decreased by 9.4 billion pounds in January while a decrease of 7.8 billion pounds was forecast. Private sector data is set to be released out of the UK on Monday.

The yen was virtually unchanged against the dollar. The Bank of Japan is set to release its latest meeting minutes on Monday which will highlight the central bank’s view on economic conditions.

The Australian and New Zealand dollars were widely stronger against the dollar. The Aussie jumped to a 2 week high and the kiwi dollar to a 1 month high as the market’s desire for risk was increased after news of an agreement was reached in Greece.

The Canadian dollar weakened against the dollar on the back of data which revealed that Canadian retail sales fell 2.0% in December at nearly a 5 year low. The market expects the Bank of Canada to lower rates once again as a result of the data which was less than forecast putting further pressure on the loonie.

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